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Government Grants: More Are Worth Less

January 28, 2014 The NonProfit Times

The number of grant recipients increased during the first six months of 2013 and the median award size of the largest grant for organizations with government funding was 400 percent larger than that of organizations with no government funding.

According to the new report “The State of Grantseeking Fall 2013,” conducted by GrantStation and PhilanTech, there was an approximately 21 percent increase in the number of award recipients compared to the same time period in 2012. And, at least one grant award was received by 81 percent of respondents during the first half of 2013.

The awards that were given out during the period were of the modest variety, according the report. Of the respondent organizations that received grant awards this year the majority of them — 57 percent – won a total less than $100,000. Some 26 percent of organizations reported winning between $100,000 and $500,000, while just 17 percent received an award of $500,000 or more.

“Simply put, organizations are applying for and receiving more awards of a smaller size, in part to augment the loss of the traditionally larger awards from government funders,” said Ellen Mowrer, business development manager at GrantStation.

Survey respondents indicated that private foundations were their largest source of total grant funding at 28 percent (up from 27 percent in 2012). Federal and state grants represented the second-highest source, coming in at 18 percent and 17 percent, respectively. Support from all levels of government decreased overall according to respondents. Organizations reported an 8 percent decrease in federal grants, a 9 percent decrease in state grants, and a 5 percent decrease in local government awards. This drop could be due to across-the-board federal budget cuts, known as the sequester.

“Respondents that receive government funding reported a median award size of $75,000. Respondents without government funding reported a median award size of $15,000,” explained Mowrer. “Organizations that receive government funding told us that grantseeking’s greatest challenge was reduced funding at a rate of 17 percent vs. 5 percent for organizations without government funding.”

Awards from other grant sources (including religious groups and the United Way) decreased by 9 percent compared to the fall 2012 survey. Other key findings from the report include:

42 percent of respondents stated that grants contributed more than 25 percent of their annual revenue.

Organizations with small annual budgets reported that 69 percent received an award; more than 90 percent of medium and large organizations received an award in the first six months of 2013.

“Lack of time and/or staff” was reported to be the greatest challenge to grantseeking among respondents, continuing a trend from the previous year’s report.